Racing industry and betting firms face slashed revenue if inducements banned

A ban on betting ads looms, but a recommendation to ban bonus bet and odds boosts offers, along with other inducements, could be an even bigger hit to racing and the wagering industry.

A ban on betting inducements could hit the racing industry hard.

The racing industry and betting companies risk losing hundreds of millions in revenue if a recommendation in a recent report into online betting is adopted.

The House of Representatives standing committee on social policy and legal affairs in June handed down its report on online gambling and its impacts on problem gambling, including 31 recommendations that mostly focused on betting advertising.

The report followed a parliamentary inquiry and proposed that all betting ads should be banned in phases over three years under a four-step model.

While that recommendation has been criticised by the betting industry, sports bodies and television networks, the nine-person bipartisan committee unanimously supported the 31 re­commendations.

But it is another recommendation that has described by one betting industry executive as a “ticking time bomb” that has worried the wagering industry the most.

Recommendation 16 in the report says “that the Australian Government prohibit all online gambling inducements and inducement advertising, and that it do so without delay”.

Gambling industry sources have told The Australian up to about 30 per cent of betting turnover for some companies is inducements, including bonus bets for customers, money-back offers on certain bets and other special offers such as the increasing of odds on particular races or events.

If inducements are banned then wagering industry executives have warned that while their revenue will be dramatically reduced, the revenue that flows to state governments via point of consumption taxes and funding to the racing industry based on betting turnover will also be slashed.

One source said $100m in point of consumption taxes could be lost.

Gambling industry sources have told The Australian up to about 30 per cent of betting turnover for some companies is inducements. Picture: Getty Images

Responsible Wagering Australia, which represents bookmakers such as bet365, Betfair, Entain, Sportsbet and PointsBet, said there was also a risk that punters would turn to banned foreign operators as a result of the mooted ban.

“The committee’s recommendation to ban offers – such as bonus bets and cash-backs – would have severe consequences for the safety of Australian punters, the strength of the Australian economy and the financial viability of the racing industry,” a RWA spokesman said.

“The committee’s recommendation ignores international evidence from Denmark, Sweden and Norway, and evidence provided to the committee during the inquiry, that shows banning these products would incentivise Australians to turn to illegal offshore markets as they seek out these ­options.”

The RWA spokesman said that customers who bet with illegal offshore bookmakers had little consumer protection and sometimes didn’t receive winnings they were owed, and that “the Australian economy loses billions of dollars through product fees and taxes that onshore providers are required to pay, but offshore providers do not”.

Fewer betting industry executives are understood to be opposed to the banning of advertising of inducements, which is already restricted in some jurisdictions.

NSW has banned advertising inducements, including an inducement to open a betting account, while Queensland has taken a similar approach that includes banning inducements for a customer referring a friend to open an account.

Meanwhile, Communications Minister Michelle Rowland has begun meeting with wagering industry executives to discuss the committee recommendations.

The sweeping advertising ban has been welcomed by some in the industry, with Tabcorp chief executive Adam Rytenskild admitting publicly that the “proliferation of gambling advertising has gone too far”.

Others in the industry disagree. “We understand changing sentiment on advertising, and we made that very clear during the inquiry. We believe an approach that significantly reduces the number of ads rather than complete bans would respond to community concerns, while still supporting sport and media,” Sportsbet CEO Barni Evans said.

Other recommendations include the appointment of a federal minister dedicated to reducing online gambling harm, a new national regulator and changes to behavioural algorithms in apps released by gambling companies for their customers.

But it is the call for the banning of betting advertising that has attracted most attention.

Labor MP and standing committee chair Peta Murphy said gambling advertising was “grooming children and young people to gamble and encourages riskier behaviour”.

“Online gambling companies advertise so much in Australia because it works,” Ms Murphy said in the report. “Online gambling has been deliberately and strategically marketed alongside sport, which has normalised it as a fun, harmless and sociable activity that is part of a favourite pastime.

“... The torrent of advertising is inescapable.

“It is manipulating an impressionable and vulnerable audience to gamble online.”

In his budget reply speech earlier this year, Opposition Leader Peter Dutton called for betting ads to be banned during the broadcast of sports games, saying the “bombardment of betting ads” during sports games was “normalising gambling at a young age”.

The first phase of the mooted betting ad bans could be introduced later this year.